Cape hospitals stay the course

While other community hospitals are affiliating with larger health care organizations, the Cape's two hospitals are bucking the trend by remaining independent.

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By CYNTHIA McCORMICK

capecodtimes.com

By CYNTHIA McCORMICK

Posted Jan. 28, 2013 at 2:00 AM

By CYNTHIA McCORMICK
Posted Jan. 28, 2013 at 2:00 AM

Merger pressures

Reimbursement cuts, decline in elective procedures, barriers to credit and migration of care to lower cost settings all are affecting community hospitals' ability to go it alone, according to healt...

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Merger pressures

Reimbursement cuts, decline in elective procedures, barriers to credit and migration of care to lower cost settings all are affecting community hospitals' ability to go it alone, according to health consultant Navigant Healthcare.

During a 2012 fall institute meeting of the South Carolina Healthcare Financial Management Association, Navigant said the rising cost of information technology and the move of an aging population from private insurance plans to Medicare also play a role.

The consultant said the number of community hospitals nationwide has declined from 5,830 in 1980 to 4,985 in 2010.

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HYANNIS — The announcement by Jordan Hospital in Plymouth last week that it intends to become part of a Boston-based system leaves Cape Cod and Falmouth hospitals bucking a trend.

While other community hospitals are affiliating with larger health care organizations, the two hospitals run by Cape Cod Healthcare remain independent.

In recent years, Nantucket Cottage Hospital and Martha's Vineyard Hospital became members of Partners HealthCare, the parent company of Brigham and Women's and Massachusetts General hospitals in Boston.

Merging with larger systems makes it possible for smaller hospitals to come up with the cash for electronic medical records systems demanded by health care reform and to invest in infrastructure — important in an age of declining hospital payments — health care analysts say.

"It's absolutely a trend," said Lynn Nicholas, president and CEO of the Massachusetts Hospital Association.

"It's a trend nationally. It's a trend that's on steroids in Massachusetts, where it's happening at a very rapid pace."

Nicholas predicted that the pressures on independent hospitals to merge would intensify over the next few years.

But she said Cape Cod Healthcare has a unique position from which to hold onto its autonomy, being geographically isolated with a large pool of patients.

"It's a unique community and a unique environment," Nicholas said. "They've got a nice continuum of care there. (Cape Cod Healthcare) is not surrounded by other hospitals."

Cape Cod Healthcare already has an assortment of clinical affiliations with various Boston hospitals.

The Cape Cod Hospital open-heart surgery program operates with surgeons from Brigham and Women's Hospital.

And the local health care system recently announced its intentions to strengthen its clinical partnership with Brigham and its parent company, Partners, by sharing interns and increasing access to subspecialty services.

But the partnership remains a step removed from the more formal affiliations Partners has with Nantucket Cottage and Martha's Vineyard hospitals, which are described as member hospitals on the Partners website.

"Ours is only a clinical affiliation," said Patrick Kane, Cape Cod Healthcare vice president of marketing. "Nobody is calling the shots except Cape Cod."

While there are benefits to ducking under the umbrella of a large health care organization, there also are drawbacks, Donald Thieme, executive director of the Massachusetts Council of Community Hospitals.

For smaller community hospitals, especially those in the red, hearing that a system like Partners intends to invest $600 million in upgrading its information system makes a courtship attractive, he said.

On the other hand, joining a large organization forces the smaller hospitals to compete for resources with other players in the system, Thieme said.

"I think the jury is out whether bigger is better for a local community," he said.

Thieme called Cape Cod Healthcare a well-run hospital system that seems to be able to maintain its independence, at least for now.

A disagreement with the board of Cape Cod Healthcare is reportedly behind the sudden and unexpected November 2010 departure of Cape Cod Healthcare CEO Dr. Richard Salluzzo.

Hospital officials have said Salluzzo was interested in partnering with other hospitals as a way of staying financially viable while the local board wanted to preserve Cape Cod Healthcare's independence.

The only big merger that occurred was in 1996, when Cape Cod and Falmouth hospitals joined together to form the current health care system.

Jordan Hospital, which draws 25 percent of its obstetric practices from the Upper Cape, has been an independent entity since being founded about 100 years ago.

Changes in the health care delivery system, including the development of accountable care organizations that require hospitals and doctors to take on more risk and divvy up a pool of money, made the idea of looking for a partner attractive.

"Things are changing," Jordan Hospital CEO Peter Holden said.

"We just knew we weren't big enough" to come up with the investment in technology and infrastructure demanded by health care reform, especially during a time of reductions in traditional payments, he said.